Today, the April US Consumer Price Index, which is the most noticeable this week, will be announced. According to market forecasts in advance, year-on-year growth is expected to be 8.1%, a slight slowdown from the previous 8.5%. The year-on-year rate of change in core is 6.0%, which is also expected to slow down from the previous 6.5%. In addition, the month-on-month growth is expected to be 0.2%, which is considerably stable from the previous 1.2%. On the other hand, the core month-on-month rate is expected to be 0.4%, exceeding the previous 0.3%.
If the forecast is received at face value, there are many items of slowing growth, and it may be regarded as a sign that inflation peaks out. However, the year-on-year growth rate is still too high. It won’t be enough to set back the US monetary authorities’ expectations of a 0.5% rate hike this year.
Currently, the stock market has stopped declining due to the weakening of risk alerts such as the slowdown in the pace of infection in China. If the US consumer price index falls short, the stock market will continue to feel reassured. On the other hand, if the result of a surprise that the growth rate exceeds the previous time, the reaction of stock price depreciation will spread again with bond sales.
In the medium term, there seems to be some points to keep in mind regarding the trend of a stronger dollar. The recent market trend has been leaning toward a stronger dollar due to risk caution due to stock price depreciation and rising US bond yields. Risk products such as crude oil and gold are also sold. Investors’ money is flowing back into cash called dollars. In other words, it doesn’t seem to be a situation where you can take risks. It is also pointed out that investors’ funds may not return to risk assets for some time unless the global economic environment improves.
I want to get on with the flow of USD after US consumer price index